Are Investors Undervaluing Midland States Bancorp (MSBI) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Midland States Bancorp (MSBI). MSBI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.71, which compares to its industry's average of 9.33. Over the past year, MSBI's Forward P/E has been as high as 9.44 and as low as 5.54, with a median of 7.21.
Investors should also recognize that MSBI has a P/B ratio of 0.87. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. MSBI's current P/B looks attractive when compared to its industry's average P/B of 1.32. Within the past 52 weeks, MSBI's P/B has been as high as 0.93 and as low as 0.62, with a median of 0.73.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MSBI has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.74.
Finally, we should also recognize that MSBI has a P/CF ratio of 6.18. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.98. Over the past 52 weeks, MSBI's P/CF has been as high as 6.50 and as low as 3.65, with a median of 4.37.
Bank OZK (OZK) may be another strong Banks - Northeast stock to add to your shortlist. OZK is a # 2 (Buy) stock with a Value grade of A.
Additionally, Bank OZK has a P/B ratio of 1.06 while its industry's price-to-book ratio sits at 1.32. For OZK, this valuation metric has been as high as 1.40, as low as 0.87, with a median of 1.03 over the past year.
These are only a few of the key metrics included in Midland States Bancorp and Bank OZK strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, MSBI and OZK look like an impressive value stock at the moment.
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Midland States Bancorp, Inc. (MSBI) : Free Stock Analysis Report
Bank OZK (OZK) : Free Stock Analysis Report
